BiggerPockets

How to Create Multiple Streams of Income: Buying Homes in Nice Areas with Nothing Down

by Peter S. Conti, David M. Finkel

That book there will tell about all the ABC to 123 steps in how to do it.

Whatsup, brother...

From what I know so far, you can assign the option to purchase and the lease. You've got to make sure that there are no restrictions expressed in the lease-option contract that prohibits assignment. Also, when you do assign the lease-option, it is good to seperate the documents (the option and the lease) and keep them that way. On the flip side, it is good to have a combined lease-option contract between you and your optioner. Here are the reasons: legal positions.

Don't ask me for details because I don't know them, but I can tell you that combining the lease-option contract (filing it with the courthouse as well) solidifies your interest in the property as opposed to seperating the two which will weaken your legal position in court in the event that your optioner is crooked and has all types of liens and such on the deed that he did not disclose with you.

Now, YOU, as the optioner, may want to seperate your lease and option to purchase contracts because it will strengthen your position in court in the same way as described above. Buyers can get ugly too, especially when they forfeit their option due to to late payments which will make the evildoer attempt to waste your time in court.

Anyway, yes, make sure that there are no restrictions in the contract(s).

The Selling part:

Again, from what I know thus far, you can either assign your contract(s) and set up your own sublease-option deal or you will participate in a double-closing prior to the expiration of your option. Sooner or later (before your option expires) you will either need to buy the property outright and quickly resell or do the double-closing bid and never really own the property at any given time.

- Jugg

Yes,

When you structure your deal, be wary of a few things:

- Your rent credit cannot be ridiculously high, when the tenant/buyer decides to start executing, the banks will need to see credibility in the monthly payments. Your numbers seem cool... alittle high, though.

- You do not want the rent credits + the down payment to exceed your spread. In other words, make sure the money you receive will not be tied up for any period of time. You should be able to spend that money free and clear with no worries. None of that money should go to your mortgage payment.

Anyway,

Yes, if they do not execute by the time the option expires, you keep everything. Again, be aware that this will more than likely upset the tenant buyer unless they really don't want the house, are aware of their loss, and are ready to move on or drop the option. Other than that, if you get the excuses... be prepared for war.

- jugg2000

Originally posted by Guy Minott

Whatsup, brother...

From what I know so far, you can assign the option to purchase and the lease. You've got to make sure that there are no restrictions expressed in the lease-option contract that prohibits assignment. Also, when you do assign the lease-option, it is good to seperate the documents (the option and the lease) and keep them that way. On the flip side, it is good to have a combined lease-option contract between you and your optioner. Here are the reasons: legal positions.

Don't ask me for details because I don't know them, but I can tell you that combining the lease-option contract (filing it with the courthouse as well) solidifies your interest in the property as opposed to seperating the two which will weaken your legal position in court in the event that your optioner is crooked and has all types of liens and such on the deed that he did not disclose with you.

Now, YOU, as the optioner, may want to seperate your lease and option to purchase contracts because it will strengthen your position in court in the same way as described above. Buyers can get ugly too, especially when they forfeit their option due to to late payments which will make the evildoer attempt to waste your time in court.

Anyway, yes, make sure that there are no restrictions in the contract(s).



The Selling part:

Again, from what I know thus far, you can either assign your contract(s) and set up your own sublease-option deal or you will participate in a double-closing prior to the expiration of your option. Sooner or later (before your option expires) you will either need to buy the property outright and quickly resell or do the double-closing bid and never really own the property at any given time.


- Jugg

How would the double closing work?